Monday, July 28, 2008

Is This The End?

Mike Whitney gets apocalyptic:
Bank runs are a direct hit on the foundation of the free market system. Unchecked, the tremors can ripple through the entire society and trigger violent political upheaval, even revolution. The public may not grasp their significance, but everyone in Washington is paying attention. They take it seriously, very seriously. It is a sign that the system is disintegrating and it may be irreversible.

An article in the San Francisco Business Times said that the FDIC is worried about the reporting on Internet blogs. They'd rather keep banking system's troubles out of the news. The publicity just further undermines the publics confidence and spreads fear. Sheila Bair, chairman of the Federal Deposit Insurance Corp., summed it up like this after the run on Indymac:
"The blogs were a bit out of control. We're very mindful of the media coverage and blogs in controlling misinformation. All I can say is were going to continue to stay on top of it. The misinformation that came out over the weekend fed a lot of depositors' fears."
Is that a threat? The cure for a failed banking system is adequate capital and prudent oversight not threats to critics of the system.
It's ironic, isn't it? Those who turned to fear as their main political weapon are now afraid that widespread fear of an economic crash could signal the end of the world as they know it.

From the comments at ICH:
What is $20,000 worth of debt when it will cost that much for a bag of groceries.
There's one case where I'd work very hard to eliminate debt: if I'd bought a fully loaded SUV on poor terms last year. It's way past time to unload that for an economical second hand car or if homeless looms as a potential, a van you can sleep in.
The american dream was sold to the ignorant, and now they will pay for there easy life. They will pay for the blood of 20,000,000 human beings the CIA/Pentagon has murdered with their tacit consent of the last 60 years. They will pay and their children will pay with poverty, disease, and violence. I am in Argentina looking at the history of the monetary devaluation which the Chicago Boys orchestrated here in 2002 when the peso was devalued from 1 to 1USD to 4 to 1 USD overnight.
People should start eating alot while they can. Put some weight on if you're not fat.
Take your pick of the free advice on offer!